Tuesday, September 14, 2010

The market continued to grind higher today as expected in yesterday's update. While there are a variety of ways to label an impulse higher since 9/7, it appears that there will be at least one more move higher testing 1130. The count above suggests two more rallies higher (wave [5] of iii and wave v) until wave (c) is complete.

The target for (c) is near strong resistance in the 1130 area. The 61.8% target above works well with the resistance area and should stop the rally.

Wave (c) appears to be contained in zigzag wave [w] of double wave 2. Wave [x] is unusual (a running flat) but the overall picture appears to be sound.

In the short term the market is very overbought, near the upper Bollinger band, and at resistance. A decline should be coming. Given the Elliott Wave picture, it is likely to be a large one even if primary wave [3] is not underway. Selling short at the current levels is a high probability, low risk trade.

As a reminder, I will be on vacation this Thursday through the following week. 9/26 or so will be the next regular update following tomorrow's final update. I may provide brief comments in the form of blog posts during my time away.

The market continued to grind higher today as expected in yesterday's update. While there are a variety of ways to label an impulse higher since 9/7, it appears that there will be at least one more move higher testing 1130. The count above suggests two more rallies higher (wave [5] of iii and wave v) until wave (c) is complete.

The target for (c) is near strong resistance in the 1130 area. The 61.8% target above works well with the resistance area and should stop the rally.

Wave (c) appears to be contained in zigzag wave [w] of double wave 2. Wave [x] is unusual (a running flat) but the overall picture appears to be sound.

In the short term the market is very overbought, near the upper Bollinger band, and at resistance. A decline should be coming. Given the Elliott Wave picture, it is likely to be a large one even if primary wave [3] is not underway. Selling short at the current levels is a high probability, low risk trade.

As a reminder, I will be on vacation this Thursday through the following week. 9/26 or so will be the next regular update following tomorrow's final update. I may provide brief comments in the form of blog posts during my time away.

My trading philosophy is 95% based on my own Elliott Wave analysis of the S&P 500. I try to keep my analysis and trading as simple as possible and do not use trend lines, channels, or definite retracement, price, or time targets. To me, inspecting the proportionality and symmetry of a market's price structure is the key to mastering the principle; it is through this that low-risk, high-reward trading opportunities are found.

Because they are the only things I look at when trading, the quality of the charts I post on this blog are very important to me. I think you will find my work to be the best Elliott Wave analysis of the S&P 500 on the internet.